Luverne prioritizes 2020 capital purchases

The Luverne City Council is poised to spend more than $16 million in capital expenses next year, according to budget estimates from city department heads.
That comes on the heels of 2018 and 2019 capital spending that exceeded $12 million and $14 million, respectively, reflecting a flurry of development that Luverne hasn’t seen in decades.
The $120 million tru Shrimp project didn’t materialize, but the infrastructure investments in Luverne’s industrial park will benefit the city for years to come.
Premium Iowa Pork is investing $30 million to retrofit the former IBP plant for a 2,200-per day hog slaughter operation and will pony up $6.7 million toward the city’s $14 million wastewater treatment plant upgrade.
The $16 million Armory construction project near I-90 will require adequate streets and utilities, and the city continues selling lots in the industrial park to businesses and industries coming to Luverne.
Following is the 2020 capital expense list itemized by department. It includes items with an expected life of more than one year and a value of more than $5,000.
 
Sewer department: $14.34 million
•$14.28 million is budgeted for the wastewater treatment plant improvement project. General Obligation improvement bonds will cover $7.765 million and Premium Iowa Pork is paying $6.7 million. (See the related story)
•$50,000 is budgeted each year for sewer line replacements, if needed.
•$12,000 will cover one-third the cost of a backhoe to be shared with the water and electric departments.
•$15,000 is budgeted each year to update and replace waste water plant equipment, if necessary.
 
Electric department: $522,000
•$140,000 will replace two breakers in the east substation. They are obsolete and parts are no longer available for them.
•$150,000 is budgeted each year for distribution system upgrades to improve reliability. The electric department will replace older primary cable and reduce radial feeds by making loops.
•$100,000 will pay for tuck pointing, windows and roof work on the power plant.
•$50,000 will buy the electric department its own skid steer. It used to share one with the water and sewer department, but it’s often not available when needed, especially during snow events.
•$50,000 is budgeted each year for transformer purchases to accommodate city growth and to replace failing equipment when needed.
•$20,000 will pay for power pole replacements in 2020. After that, the city will budget $30,000 for poles. The light fixtures will also be replaced with LEDs and banners will be replaced as needed.
 
Luverne Loop: $584,000
Capital purchases for the Luverne Loop hiking and bike path next year include $584,000 for Phase 3 construction, but $150,000 will be covered by Local Trail Connection Grant.
 
Street Department: $190,000
•$170,000 will pay for a new street sweeper to replace the 2012 equipment that has 4,000 hours. The anticipated useful life of a street sweeper is eight to 10 years.
•$20,000 is budgeted each year for the next three years to retrofit one snow plow each year to extend the life of the equipment.
 
Water department: $92,000
•$40,000 is budgeted each year for water main looping when needed.
•$40,000 is also budgeted each year for system upgrades when needed.
•$12,000 will will cover one-third the cost of a backhoe to be shared with the sewer and electric departments.
 
Pool and fitness: $24,500
•$10,000 is budgeted each year to replace exercise equipment as needed.
•$14,500 will pay for a second climbing wall and safety flooring.
 
Liquor store: $14,000
•$14,000 will pay for roof shingles in 2020.
 
Central garage: $55,000
•$55,000 will pay for a 20-by-25-foot addition to the existing public works building to add another stall for the city mechanic.
 
Fire Department: $64,000
•$54,000 will waterproof the basement walls of the fire hall to address a water seepage problem.
•$10,000 will buy a rescue boat to replace the current one, which is unsafe and tips over easily.
 
Airport: $65,000
•$5,000 will pay for relocating the Automated Weather Observing System at the airport.
 
Civil defense: $20,000
•$20,000 is budgeted to replace a civil defense siren each year until all have been replaced.
 
Parks and recreation: $13,000
•$13,000 will pay for a skid loader upgrade and an additional attachment.
 
Capital expenses factor in levy proposal
The 2020 capital improvement plan is part of a five-year plan that helps the city council with long-term budgets. The list can be a moving target, with some purchases delayed or expedited, depending on needs.
These expenses are taken into account when the city approves a proposed levy for taxes payable the following year. (See the related levy story.)
On a flow chart of capital budgets over a five-year period, 2018, 2019 and 2020 are off the chart with $12 million, $14 million and $16 million totals respectively.
Luverne’s capital budgets have typically hovered around $2 to $3 million per year, but in recent years, the city’s aging infrastructure has come due for upgrades, spurred by developments in the city’s industrial park.